Q3 2017 Key Market Indicators – Victoria

The results are in: Victoria records the 2nd
highest in home affordability growth, at 6.6% over the past 12 months to March
2017; and the 2nd highest growth in nett migration – by 25.9% over
the past 12 months to December 2016.

The PRDnationwide Q3 2017 Key Economic Indicators provide
consumers with a quick snapshot of the current state of affairs from an
economic and property perspective. The PRDnationwide Key Economic Indicators
cover both national and state level data, comprising of:

Number of loans to first home buyers

Home loan affordability index

Number of dwelling approvals

Consumer sentiment index

Standard variable loan

Consumer price inflation index

Unemployment rate

Weekly family income

Nett migration

A key finding for Victoria is in relation to potential
future demand for residential real estate, as nett migration has increased by
25.9% over the past 12 months to December 2016, currently at 23,447 people. This
is the 2nd highest growth out of all the states, and even higher
than NSW (22.9%). Dwelling approvals in March 2017 is recorded at 5036, which
is a decrease of 6.8% over the past 3 month, 14.2% over the past 12 months.

This suggests a true potential for undersupply in the
market, a welcome news for astute investors and developers looking to plan for
their next residential and/or mixed-use projects.

Home loan affordability growth in Victoria is the 2nd
highest amongst the states, at 6.6% over the past 12 months to March 2017. At a
reading of 30.8 index points this is still lower than the Australian average,
however is higher that NSW’s reading of 27.7 index points. This is reflected in
the 2.6% increase in number of loans to first home buyers over the past 12
months – currently at 6037 loans in March 2017. This is a contrast to NSW’s
figures, which shows a decrease of 5.2% (over the same time period) to 3597
first home buyer loans.

The Victorian unemployment rate increased to 6.1%, however the
weekly family income has increased to $1,639. This suggests wage growth and
strong potential for future economic growth, which is good news for both owner
occupiers and investors.